14.06.2014

The market has confidence in the Government that it can meet and service its liabilities

 At the moment there is no need to issue other debt on the international markets, Minister of Finance Petar Chobanov said in an interview for Sedmitsata (The Week) programme of Darik Radio. He specified that the government debt strategy had been smoothly and evenly implemented since the beginning of the year. The Minister reminded that this year there was no such tension like the one observed in 2013 when the money to the agricultural producers had to be paid. According to Minister Chobanov this is due to the liquidity planning and the short-term issues being discussed with key market players. He commented that despite the hysterical talking there was drop in the yield on the domestic market, which was due to the market having confidence in the Government that it could meet and service its liabilities. "In the situation that we are at the moment it is important to cool down the insinuations about the debt in order to successfully launch the planned issue, because it does not matter which is the government but this liquidity must be ensured because of the old debts", the Finance Minister specified. "The aim of the international issue is not to take this liquidity from the economy of the country, it should remain in the banking system in order to enable the revival of crediting", Petar Chobanov added.

The comments about a BGN 10 billion "hole" in the budget are definitely not true; those are part of the overall background created and aimed at reinforcing the political pressure, the Minister of Finance commented. He forewarned that however that could have serious consequences for the State because financial stability was not easy to achieve and to achieve true financial stability was even harder. "And if we witness such insinuations that have their listeners who could even believe them, this creates an overall uncertainty", Minister Chobanov said and added that "we cannot say that a state is in bankruptcy when at the end of February 2013 the fiscal reserve was BGN 3.9 billion and at the end of April 2014 - BGN 6 billion". Petar Chobanov commented also the budget deficit as of the end of April 2014 stating that the fiscal policy strategy and the budget implementation as a whole was to constantly accelerate revenues with each month during the year. This could be seen from the data which show that if for the first four months of the year for tax revenues, social and health insurance contribution excluded, collected by the NRA the increase is 0.7% then for the first five months of the year this indicator cumulatively increases up to 5.5%.

In respect of taxes the Minister of Finance stated that definitely there should be no rate increases. He commented also the possible changes in the methods of defining the waste fee which should be linked to the actual price of the service. Chobanov added that the discussions thereon and its impact on the households and businesses continued and there was no final decision yet. We continue the discussions and when we reach an understanding we will make it available to the public, the Minister stated.